Trade of the Day: TiVo Corp (TIVO)

TIVO is making some progress with its product line that I expect to be very advantageous

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TiVo Corp (NASDAQ:TIVO) has become more creative and is now creating DVR boxes for all types of video content…not just cable TV, but streaming as well, including YouTube Red. And, of course, a lot of people have now “cut the cord.” So TiVo is adjusting to that situation; I think that’s going to be very advantageous.

TIVO also has a very low price/earnings ratio — by some calculations it’s around 8:1 — so it really is a bargain price at the moment. Here is my bullish recommendation, a naked put write:

Sell to open the TIVO Dec. 15th $16 put at about $0.35.

For those who may not be familiar with this strategy, a naked put write is a bullish position in which you expect the price of the underlying stock to increase. You’ll want to watch out for a move below $16, as if you are holding the option at expiration and the stock is trading below the $16 strike price, the puts will be exercised and you will be required to purchase the underlying shares.

But, as long as TIVO remains above $16 through expiration on Dec. 15, we’ll walk away with full profits.

Ken Trester is editor of the popular Maximum Options program. Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.


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